Price of eggs ‘to rise’ as input costs, reduced flocks, puts the squeeze on farmers after COVID




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Naomi Forbes and Daniel Hartog have limited their farmgate sales due to an egg shortage. (ABC Rural: Jessica Schremmer)

A tightening supply of eggs on supermarket shelves has left some producers warning the shortage could last for months and drive up prices for consumers.

The shortage in some states is the result of reduced demand for eggs during the pandemic, which left producers with no other choice than to reduce their flock size.

Since the easing of restrictions, the reopening of borders and hospitality venues, demand for eggs has increased rapidly.

Rising input costs to produce eggs and flooding in Queensland and South Australia have also added to supply issues.

Tasmania’s Pure Foods Eggs chief executive officer Kate Daley said 2020 and 2021 were difficult for the industry because many farmers were left with surpluses.

“Our production went down by 30 per cent during COVID-19 and, as a result of that, we had eggs we were unable to sell, which meant we had to let some flocks go earlier than planned,” she said.

Delays for laying hens

Ms Daley said that to understand the egg shortage in the market, it was important to understand laying chickens.

“It takes months of planning to organise a chicken hatch date, and from the time the chicken emerges from its egg, it takes around 20 weeks before they are able to start laying eggs,” she said.

“So there is a shortage of eggs in Australia because we weren’t able to make good decisions around egg production last year when the borders were still closed and the future was uncertain.

“It’s likely that there will be a shortage for much of 2022 until new flocks of hens start laying.”

Egg Farmers of Australia CEO Melinda Hashimoto said some areas were recording egg shortages.

“We certainly know there have been some very tight supplies over in Western Australia and most recently there was a shortage for a little while when there was an impact due to the floods in Queensland,” she said.

Prices likely to rise

According to Thomas Elder Markets analyst Matt Dalgleish, the average consumption of eggs in Australia was 249 eggs per person per year, equating to 14.4 kilograms of eggs.

He said skyrocketing input costs were negatively affecting producers’ viability to expand flocks, and consumers needed to be prepared to pay more so that farmers could receive a fairer return.

“Wheat has gone from $280 per ton to $370 per ton, soy meal [from] $600 per ton to $1,000 per ton, canola oil [from] $1,200 to $2,900 per ton, so that’s more than doubled,” Mr Dalgleish said.

“When you get into these kinds of numbers it does have an impact on the feed ratios hens are provided.

“That certainly has some baring on the actual number of hens being put in when the costs have gone up.”

He said eggs had been a low-cost protein source with prices at 1990 levels but consumers needed to “look at spending a bit extra”.

“That way, with the skyrocketing input costs, certainly farmers get a fairer return for their product,” Mr Dalgleish said.

“It will allow them to keep running their farms, many of which are family-run farms.”

High input costs

Sibling egg farmers Naomi Forbes and Daniel Hartog, from Tasmania’s north-west, were experiencing the difficulties first-hand.

The duo were forced to reduce their flock-size in the past two years and were now struggling to meet demand, having been forced to limit farmgate sales to a dozen eggs per customer.

“Within one week we were short by 40 per cent of supply,” Mr Hartog said.

“We are producing 35 boxes a day and we are getting orders for 80.

“It’s been a lot of headaches, thinking very hard how we are going to juggle and better supply each and every customer.”

During the pandemic, when they were left with a large oversupply, Ms Forbes said they donated their eggs to charities and homeless kitchens.

“We saw a need and it was a way for us to give but there is no return on that, so it makes it really hard to pay for your feed and everything else,” she said.

Faced now with high input costs, they have been forced to rise their prices slightly.

“A lot of people are struggling financially, so you don’t want to make a protein source even dearer,” Ms Forbes said.

“We just raise it enough to cover the cost of the deliveries.”

Pure Foods Eggs has also had to increase its prices for their produce on shelves.

“The increase in cost associated with COVID has been unavoidable, where we have needed to pass through a modest increase of around 10 per cent,” Ms Daley said.

Source: Thanks msn.com